So, you want to travel the world but you’re flat broke, in debt or don’t know where to start with your savings? I was once in the same boat. After 4 years living abroad in Canada making minimum wage and only just scraping by, I moved home to my native Melbourne with only pennies to my name.
In the 2 years I spent at home I scrimped and saved to get my debt low and savings high. Here’s my tips on how to limit your spend and save money to get you where you want to be…on the road!
1. Don’t own a car
This has to be hands down the biggest on how to save money that I can give you. Get rid of the wheels and watch your money grow. Yes, it sucks waiting for a bus with a weeks’ worth of groceries in the dark, the cold, the rain or in the summer heat and humidity. It’s definitely an adjustment but trust me, the amount you’ll save in registration, petrol, parking, repairs, maintenance and insurance will very quickly add up.
2. Learn to deal with FOMO (fear of missing out)
I have to admit I suffer from pretty severe cases of FOMO. If I know that my mates are at the pub, have tickets to a concert or are doing anything in general I absolutely want to be there with them. This is something I had to learn to let go of. I’m not saying you need to become a hermit, but set a limit on your weekly spend for eating out and entertainment and once it’s reached say no. You’ll be thankful in the morning when you don’t wake up with a hangover along with the couple hundred dollars missing from your account after all the entry fees, booze, late night food and Uber home. Put what you WOULD have spent, straight into your savings account.
3. Pay extra taxes and get a fat return
I accidentally took this to the extreme by complete accident. I don’t know how they do things where you’re from but, in Australia you’re trusted to fill in your tax file declaration form all on your own. Something that I apparently haven’t quite been able to master. In my case, I selected the wrong box and was taxed at the highest possible bracket. Meaning, I was paying almost half of my wages in taxes. This seemed high at the time but thought that this is just what happens when you work in sales and never questioned it. Then, at the end of the tax year, I got a huge return of almost $8k. Oh. My. God. Suddenly, my savings account was looking pretty healthy. This is something you can choose to do. I don’t recommend paying half your wages in taxes, but, pay an extra $50 a week. You will barely notice the difference and at the end of the financial year you’ll have $2,400 in your pocket!
4. Open a savings account you can’t touch with a second one for emergencies
This one took me a while to get on board with. It’s daunting to know that once you send your funds over to savings, that’s where they have to stay. And I know what you’re thinking…what if I get the FOMO and I have used all my money on bills like a responsible adult and I just want to be able to go for a beer this ONE TIME! Ok, I get it, and if this is you, it’s ok to have multiple savings accounts. Start putting small amounts of funds away into the account you can’t touch and have a contingency savings account. One you can move money out of easily for emergencies. Like beer…
5. Stay away from the cinema
This one sucks because I actually really enjoy going to a movie at the cinema. There’s just something about the popcorn and giant coke that I can never finish but still insist on getting every time that brings me so much joy. But, a ticket alone in Australia will set you back $20, plus snacks. Instead, I got myself a Netflix subscription and watched B grade actors in B grade movies and just longed for the cinema. I know I make it sound bleek, but it’s really not so bad.
“My biggest advice is not to beat yourself up if it takes you a little longer or if you fall off the savings wagon every now and then.”
6. Find activities that don’t cost a cent
I was lucky to live right by the beach. I spent my evenings after work and weekends hanging on the sand, swimming, reading and took my own snacks and drinks to save on costly kiosk treats. I also frequented the markets and attended free food or music festivals. There’s always a ton of activities going on around the city, just keep up to date with what’s on in your town and you’ll find there’s plenty to do without spending major dollars.
7. Be the social organizer
Your friends want to catch up? Great! Suggest you go for a coffee, host a pot luck dinner at home or go for a picnic in the park. Anything but going out to expensive restaurants and bars that will see your account drained in no time.
8. Ditch expensive gyms
I signed up to THE most expensive gym in Melbourne purely because it was across the street from my office. I gave into the convenience and definitely paid for it. Although it was a really bloody nice gym, it offered the same amenities and facilities as any other fitness club. If you’re paying too much for your gym, shop around, there’s always a better deal out there.
9. Limit your dating
I say, ditch the dates. When was the last time you went on a good one anyway? After a date I usually feel deflated and guilty for how much I’ve spent. Friends tell me just to let my date pay but my independence won’t let me and I always insist on paying my way…sometimes both our ways because I get weirdly generous on dates. I found that dating was costing me too much for very little reward so started saying no (nicely!) anytime someone asked me out.
10. Have a savings buddy
Find a friend who also needs to save for travel, a home deposit or new car and keep each other accountable. It’s always easier to stick to something when you know you have support. And, since you’re both in the savings boat, you can stay home together on Saturday nights not on dates watching crappy movies on Netflix. Doesn’t that sound fun!
11. Sell everything
And I mean everything. I sold kitchenware, furniture, books, sports equipment and appliances. It was lengthy and frustrating given the number of times I was stood up by internet buyers promising they would buy x thing and pick it up at x time only to never show. But, it was worth it. I didn’t want to pay for long term storage so stuck with it and eventually sold off everything.
Biggest piece of advice
Don’t beat yourself up if it takes you a little longer or if you fall off the savings wagon every now and then. At the end of the day, we’re all human and life is about balance. Do what works for you and honestly, once you see the numbers in your account going up you’ll notice that’s all the motivation you need to keep it growing.